AB 9 X2
Page 1
(Without Reference to File)
ASSEMBLY THIRD READING
AB 9 X2 (Petrie-Norris)
As Amended October 1, 2024
2/3 vote
SUMMARY
Requires the California Energy Commission (CEC), in consultation with the California Air
Resources Board (CARB), to report to the Legislature by July 1, 2025, on specified potential
solutions to increase the supply of gasoline as identified by the 2024 CEC Transportation Fuels
Assessment. Permits CARB to adopt a fee on ethanol producers, as specified, to cover all or a
portion of CARB's costs associated with the development, implementation, and enforcement of
gasoline blends from >10% up to 15% ethanol by volume. Requires the fee cannot exceed $5
million, collected over three years. Requires CARB to complete its multimedia evaluation of
gasoline containing up to 15% ethanol (E15) by July 1, 2025.
Major Provisions
COMMENTS
Production Enhancements for Fuel Blends. In August 2024, the CEC issued its first
Transportation Fuels Assessment, as required by a provision of SBX1-2 (Skinner, Chapter 1,
Statutes of 2023). The assessment included several potential strategies worthy of further analysis
that could increase production of gasoline by modifying fuel standards, including:
1) Increasing ethanol blending to 15% of fuel volume;
2) Modifying the timing of summer-blend gasoline requirements;
3) Allowing in-state use of non-CARBOB-compliant gasoline with a mitigation fee; and,
4) Sending CARBOB fuel to Reno through its pipeline connection to California.
It is these potential policies by which this bill seeks to require the CEC to produce a timely
recommendation to the Legislature. This action accelerates work underway, in an effort to lower
gasoline prices in the immediate future, without proscribing an outcome.
Multimedia Evaluation. In the 1990s, a common gasoline additive, methyl tert-butyl ether
(MTBE) was found to have contaminated groundwater in a number of wells throughout the state.
MTBE was used as an alternative to lead in gasoline, permitted by fuel specifications at the time
but not required. Partly as a result of this contamination episode, a series of reforms were made
to the process by which fuel specifications are changed in the state. The multimedia evaluation is
that process. It is conducted by a working group and typically takes 2-5 years, based on a
structure developed by the Universities of California, Davis and Berkeley. That structure,
according to CARB, includes the following assessment of fuels and the issues unique to that
given fuel:
 AB 9 X2
Page 2
1) Tier I: summary report (estimate: 1 year)
a) Assesses existing scientific knowledge, identifies gaps, prepares experimental plan to fill
knowledge gaps.
2) Tier II: experimental report (estimate: up to 3 years)
a) Experiments are conducted to address knowledge gaps and conduct a risk assessment.
3) Tier III: multimedia risk assessment final report (estimate: 1 year)
a) Final report is prepared, reviewed, subject to scientific peer review, and finalized.
CARB began the process of a multimedia evaluation for increasing ethanol blending in gasoline
to up to 15% (E15) in 2018, completed Tier I of the multimedia evaluation in 2020, and the
scientific testing (albeit not the final report) in Tier II in 2022. The ethanol industry has shared
with the committee that CARB circulated its Tier III report to relevant agencies in late 2022;
however, they opine little progress has been made since. CARB currently estimates at least
another full year may be required to complete the entirety of the multimedia evaluation.
This bill does accelerate the process underway at CARB to evaluate E15, but it does so while
preserving the existing statutory requirements of the multimedia evaluation. However, the slow
progress since the Tier II scientific testing was circulated 2 years ago, raises concern about
resources constraints at CARB to finish this work, especially under the accelerated timeline in
this bill. As a result, this bill also levies a fee on ethanol producers to support CARB's work in
finishing the E15 evaluation and developing regulations.
According to the Author
According to the author, "ABX2-9 is a direct reflection of the extensive conversations in recent
informational hearings of the Petroleum and Gasoline Supply Committee, and builds off of
policies from the CEC's Transportation Fuels Assessment. ABX2-9 requires a thorough review
of policies that enhance the production of gasoline in two ways: requiring CARB to complete its
analysis of 15% ethanol blended gasoline, and requiring the CEC to explore ways to expand the
size of the Californian fuels market. These proposals will increase in-state supply through
additional channels, complementing the Governor's proposal to increase gasoline supply in the
state via inventory requirements on refiners. The potential in both of these proposals to increase
supply and drive down costs at the pump is significant, and worthy of urgent action during this
special session."
Arguments in Support
This bill is supported by the California Fuels and Convenience Alliance, who see the expanded
availability of E15 as providing "immediate and long-lasting economic benefits for
Californians." They note E15 is "less expensive to produce, offering an effective way to reduce
prices at the pump;" that it would "increase the overall fuel supply in California;" and that it is "a
cleaner alternative to traditional gasoline."
Arguments in Opposition
None on file.
 AB 9 X2
Page 3
FISCAL COMMENTS
None known. This bill has not received a hearing in a fiscal committee.
VOTES
ASM : 16-0-3
YES: Petrie-Norris, Jim Patterson, Aguiar-Curry, Alvarez, Bennett, Friedman, Garcia, Hart,
Jackson, Lee, Papan, Joe Patterson, Pellerin, Blanca Rubio, Wood, Zbur
ABS, ABST OR NV: Flora, Gipson, Muratsuchi
UPDATED
VERSION: October 1, 2024
CONSULTANT: Laura Shybut / P. & G. S. / (916) 319-2083 FN: 0005130